Self-employed workers are happiest

New research from the Royal Society of Arts (RSA) and e-commerce trading site, Etsy, has identified self-employed workers as happier individuals than traditionally employed workers, despite the challenges that working for oneself may involve.

The report, entitled ‘Salvation in a Start-Up’, interviewed approximately one thousand microbusinesses, concluding that entrepreneurialism shows no signs of slowing down as self-employment continues to increase, most notably out of personal choice rather than the previously accepted view that it was just a by-product of economic recession and high unemployment levels. When asked about their motivations for becoming self-employed, only 27% of start-up business owners attributed their decision to unemployment and difficulty securing suitable jobs during the recession period.

According to the research, there are now 600,000 more microbusinesses in the UK than in 2008 and since 2000 the number of self-employed people has risen by 30%. The trend has continued as the first quarter of 2014 demonstrates, bringing with it 183,000 more self-employed workers.

Additionally, there has been an increase in the popularity of self-employment among specific demographic groups which previously showed lower activity in this area. Women, young people and over-50s are becoming increasingly more drawn towards working for themselves.

Some may find it surprising that the motivations for becoming self-employed were not solely to work less hours and earn more money. The report highlighted that the self-employed are more likely to work longer hours and have of late experienced lower payment rates than pre-recession levels. Full-time self-employed people can earn around 20% less than employed workers and it is not uncommon for them to spend over 50 hours a week working or double the amount of hours employed people work. Only 17% of self-employed individuals seek a shorter working time, and just 21% are motivated by obtaining a higher pay rate for their work.

The report discovered, as perhaps expected, that 84% of self-employed people were more content in their working situation than being in traditional employment. 82% stated that they found more ‘meaning’ and purpose in their work than they would have found in an ordinary job.

Freedom was another positive factor that resulted from self-employment, with 87% of participants stating that they now had more freedom to do as they wished. Approximately 50% said that self-employment allowed them to manage physical conditions and illnesses more effectively, as well as one third stating they were able to care for elderly or sick relatives.

The report stated that the advantages that accompanied self-employment were found to be worth taking the business risks and financial challenges that may be involved:

“On average, full-time self-employed people earn £74 a week less than their employed counterparts, but many are willing to endure this sacrifice for the multitude of other benefits that come from working for yourself – namely greater freedom, meaning and control.”

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